Appraisal: A Fair Alternative to Litigation

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One of the most important and balanced provisions found in the Standard Fire Insurance Policy and most other property insurance policies today is the Appraisal Clause. In fact, in most jurisdictions, it is one of the only provisions that afford protection to the interests of the insured in equal measure to those afforded the insurer.

Jonathan Wilkofsky, The Law and Procedure of Insurance Appraisal, 3rd Edition

Appraisal is designed to provide for an efficient and timely method of resolving the differences between the policyholder and the carrier with regards to quantifying value and loss subject to coverage under the insurance policy. It provides many benefits to Florida policyholders, as well as to Insurance Companies.

For policyholders, it gives the policyholder some additional leverage in not having to accept the first, or second, offer from the insurance company, as “appraisal” can be requested any time after good faith negations have failed. This helps to protect the policyholder for being forced to accept a substandard offer. It also provides an alternative to litigation for issues of valuation and reduces the costs and time that would come along with a lawsuit.

Many Florida insurance companies request appraisal too!  Insurance Companies realize there is a benefit in the ability to reduce legal costs.  This allows the policy holder to avoid having to take depositions in front of lawyers, having to pay a large portions of the insurance settlement to an attorney, and having to wait sometimes up to two or three years to get the insurance claim properly settled.

Appraisal also benefits the Florida Courts by reducing their docket load and costs associated with the hearing of cases. The State of Florida has long recognized that alternatives to litigation provides cost savings and efficiencies for the disputant parties involved as well as for an overburdened judicial system.

The appraisal Clause is modeled after the standard arbitration clause, with a limited scope to the resolution of only valuation disputes with all other issues reserved for determination in a plenary action. Click this link to read more about Insurance Appraisal & Arbitration.